Citigroup Sees U.S. Oil Output Losing 500,000 Barrels a Day
- Shale companies to account for half of losses by end of year
- Weaker producers may face bankruptcy as credit markets tighten
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A funding squeeze threatens to cut U.S. oil output by as much as half a million barrels a day by the end of the year, with shale producers among the worst affected, Citigroup Inc. said.
“Capital markets thus far have plugged shale’s funding gap but are showing signs of tightening, with impacts for drilling, oil supply and global prices,” Richard Morse and Ed Morse, analysts at Citigroup in New York, said in a note. Access to high-yield credit markets for debt-strapped producers is “sharply contracting,” they said.